AI Odyssey: Beyond the Hype
Business Revolution, Ethical Implications, Strategies for Business, and the Path Forward
In this article, the authors examine the fine line between the unparalleled benefits of AI and its potential pitfalls. The authors advocate for a future where humans and AI work together harmoniously, driving innovation, productivity, and long-term success in an increasingly competitive global landscape. As professionals continue to develop and utilize AI, it is essential to remember that it is a human creation, designed to enhance humanity. AI should remain a tool for human betterment, augmenting our capabilities rather than replacing them entirely. This said, there are risks and opportunities, which are discussed by them.
In an ever-evolving world, open-sourced artificial intelligence (AI) tools like Chat-GPT have emerged as game-changers, leaving individuals and businesses pondering the future implications of these innovations. The business world faces a crucial choice: embrace these technological advancements and unlock their potential or resist progress in the field of AI and risk being left behind. For business professionals, the inner workings of these models can be perplexing, as even the brightest minds grapple with the complexities of AI. However, the real challenge for businesses is navigating the significant risks that come with AI implementation.
“AI is one of the most important things we’re working on … as humanity. It’s more profound than fire or electricity or any of the bigger things we have worked on. It has tremendous positive sides to it, but, you know it has real negative consequences, [too].” -Sundar Pichai
AI is already capable of automating simple tasks, such as sending e-mail, summarizing articles, creating social media posts, and brainstorming ideas. As automation promises increased efficiency and productivity, it also raises concerns about workforce displacement, especially amidst economic instability and the risk of recession.
Despite these concerns, AI offers businesses an incredible opportunity to enhance their operations and processes. By harnessing AI’s capabilities, organizations can improve several aspects of their business, from inventory management systems, customer acquisition processes, customer service, data analysis, and marketing personalization. The key is to strike a balance between AI-driven insights and the unique, irreplaceable qualities of human intuition, creativity, and ethical judgment.
In this article, we will examine the fine line between the unparalleled benefits of AI and its potential pitfalls. We will advocate for a future where humans and AI work together harmoniously, driving innovation, productivity, and long-term success in an increasingly competitive global landscape. As we continue to develop and utilize AI, it is essential to remember that it is a human creation, designed to enhance humanity. AI should remain a tool for human betterment, augmenting our capabilities rather than replacing them entirely.
AI has been in the early stages of implementation in businesses for the past several years, but as it improves rapidly, implementation will begin to accelerate. Businesses will need AI to operate at the levels of efficiency demanded in the new world scape of business, which means proper implementation will be an ongoing process. For businesses, it is important to remember that there is no cut-and-dry, fool-proof way to have AI enhance your company or business. On the contrary, these great technological advancements come with many failures and mistakes, but also an opportunity to thrive in the business world.
An advancement of this magnitude and nature requires leaders and executives to be willing to step out of their comfort zone. And many are willing to do so, with “roughly nine in 10 CEOs now reporting that AI has become a mainstay in their offices, allowing them to increase business productivity, improve decision-making, and reduce costs” (Nutani). This is not the time to stick to what we know, and those companies that are willing to embrace the uncertainty and quickly adapt will reap the benefits. As Thomas Edison famously said, “I have not failed. I’ve just found 10,000 ways that won’t work.”
AI has slowly been introduced and implemented into our lives, integrated into systems we use every day. For example, music streaming applications like Spotify use AI to optimize algorithms that provide music recommendations based on your history, demographics, and past patterns. AI is also present in social media feeds, recommending friends to follow based on sets of variables, like mutual followers, location settings, and more. Advertising algorithms make our lives easier by identifying our hobbies, habits, preferences, and dislikes to recommend products and brands, altogether eliminating the need for proper brand identification and alignment with individuals. AI has and will continue to change our lives.
The Current State of AI Integration in Business Sectors:
Fields such as accounting, finance, and inventory management have made significant progress with substantial enhancements in functionality and overall efficiency.
Fraud Detection and Risk Management: AI technologies have revolutionized the finance sector by refining the process of fraud detection. By tracking financial transactions and identifying anomalies, AI-powered systems can flag potentially fraudulent activities, providing an extra layer of security for financial institutions. Additionally, risk assessments for lending have greatly improved, with AI algorithms adeptly predicting borrower risk levels and facilitating more informed and accurate loan approval decisions.
Operational Efficiency: Businesses are increasingly relying on AI to automate mundane tasks. Robotic Process Automation (RPA) can handle data entry, document processing, and other repetitive tasks, significantly reducing manual errors and freeing up human resources for more complex, strategic functions. This increased efficiency is especially transformative in the accounting sector, where precision and time efficiency are paramount.
Personalized Services: AI has made strides in personalizing banking and financial services. AI-powered chatbots provide comprehensive customer support, reducing the workload of call centers and offering round-the-clock service. Furthermore, voice-controlled virtual assistants like Amazon’s Alexa are making inroads into the banking sector, enhancing accessibility and convenience.
Financial Analysis and Insights: AI is not only a tool for task execution but also a source of valuable insights. It is being employed to generate financial research, offering businesses in-depth analysis and data-driven insights that drive strategic decision-making. In investment management, AI analyzes market trends, identifies investment opportunities, and creates personalized customer experiences, thus elevating the investment process.
Inventory Management: In the realm of inventory management, AI offers precision and predictability. It can predict inventory demand, automate restocking processes, and identify patterns in sales data that humans might miss. This level of analysis and automation greatly reduces the risk of overstocking or understocking, optimizing inventory levels and reducing costs.
As we look ahead, the adoption of AI in the business world is not just a trend but a transformative shift, creating new roles and opportunities such as data analysts, AI engineers, and AI consultants. This synergy of human intelligence and AI capabilities is set to redefine the landscape of various sectors, making AI integration an increasingly central feature of business operations.
In the realm of business operations, AI integration promises a plethora of benefits that range from enhanced efficiency and productivity to improved decision-making and the identification of new opportunities.
Potential Consequences
While AI integration brings impressive benefits to businesses, it is not without potential consequences, such as job displacement and data privacy concerns.
Job Displacement
One significant concern about the widespread implementation of AI is the potential for job displacement. As AI technology becomes more sophisticated, it is capable of automating a wide range of tasks, including those traditionally performed by humans. This automation can lead to significant productivity gains and cost savings for businesses, but it can also result in job losses, especially in roles that involve routine, repetitive tasks.
There are already numerous examples of this happening, such as self-checkout kiosks in retail stores and chatbots in customer service. While some argue that AI will create new jobs as others are lost, the transition period could be challenging, as forcing workers to adapt to new systems, change professions, and alter careers can be a lot to ask. Workers may need to reskill or upskill to find employment in the new job market, which may not be feasible for everyone, since some individuals have been in certain careers their entire life.
We, as humans, are not new to the idea of transitioning and the creation of new jobs. More than 60% of employment in 2018 was found in job titles that did not exist in 1940 (Autor et al., 2022). The only difference is that with the extremely rapid growth in technology in the past few years, the transition is bound to follow suit.
Farmers made up 16% of our total employment in 1920; in 2000 they made up less than 1%, but we have more food than ever. Farm laborers and farm managers declined 96% as a proportion of total employment between 1910 and 2000, moving from 33% to 1.2%. “Laborers, excluding farmers, declined” by 64% as “a proportion of total employment” between 1910 and 2000. Operators of motor vehicles and fixed machinery grew from 1910 to 1950 28% of total employment. But by 2000, they dropped 33% below the 1910 level.
As society progresses and culture develops, occupations will change too. However, when is change too much? Where do we draw the line on change, progression, and how it impacts human development? AI will undoubtedly rewrite the future of our job market and what occupations humans perform, but it is essential to structuralize humans as an element of our work ecosystems and not replace them. Displacement is difficult to deal with, but when it becomes our reality, it can seem like the end of the world. Businesses must empower their employees to feel protected and valued, and instead train them to become functionally operative with these technologies to improve their own work capabilities.
Data Privacy Concerns
Data privacy is another significant concern associated with AI integration. AI systems often rely on large amounts of data to function effectively and predict accurately, raising questions about how this data is collected, stored, and used. In some cases, AI systems may use personal or sensitive information, which could potentially be misused or fall into the wrong hands.
Moreover, while AI integration has the potential to bring about significant improvements in efficiency, productivity, and decision-making, it is important for businesses to be mindful of these potential consequences. They should take proactive steps to manage these risks, such as implementing robust data privacy practices and developing strategies to support workers who may be affected by job displacement.
The Black Box
Notably, AI systems can sometimes make decisions or predictions that are difficult to understand, known as the “black box” problem. This opacity can make it hard to ensure that AI systems are making decisions fairly and without bias.
The “black box” issue refers to the fact that the internal workings of AI algorithms are often opaque and difficult to understand. This lack of transparency can be problematic in situations where AI is making decisions that have significant consequences, such as in the case of loan approvals, medical diagnoses, or criminal sentencing. To address this issue, there is a growing need for greater transparency in AI decision making. This includes developing more interpretable AI models, increasing access to data used in AI systems, and providing more explanations for how AI is making decisions. By improving transparency in AI, we can ensure that the technology is being used in a fair and accountable way, and that decisions made by AI systems are fully understood and justified.
Case Study Solution: Financial Statement Audit
Considering the ethical considerations and challenges, we must reskill and upskill our workforce rather than replace it. The augmentation of AI will create new jobs and job opportunities in the same industries.
The example we will be using is auditing. Auditing is a sub-sector of accounting that evaluates financial statements and records to determine their accuracy; compiling their findings into a formal audit report with objective opinions on the makeup of financial statements in an organization. Auditing is integral in upholding honest and accurate financial reporting practices and ensuring compliance with regulatory requirements. Auditing provides users of financial statements, particularly investors, the assurance that the information they are provided are complete and accurate for their decision making. Accounting and auditing make up a considerable amount of the workforce; tallying more than 1.4 million workers in 2022 in the U.S. alone (Statista). Typically thought to be a very stable and safe occupation, many fear that the laborious tasks of auditors will be replaced by AI technology, significantly lowering the number of auditors needed.
Even the top accounting firms in the world, known as the Big Four, see the opportunities of AI implementation in auditing, saying, “An analysis of AI implementation in the Big Four accounting firms found that auditing is particularly suited for AI implementation because it deals with large quantities of company financial and non-financial data sources” (UNH).
The audit profession will surely look different as time progresses. An auditor’s role may begin to transition towards a more supervised human-in-the-loop system where auditors oversee and work with augmented systems. Thus, industry knowledge is still essential, if not more so than ever. To be an effective and contributing auditor in the future, you must be able to work with these augmented AI systems, which automate repetitive mundane tasks like data entry and analysis, freeing up time for the audit professional to critically think and develop better insights. Overall, these augmented systems enable auditors to offer more value-add to their clients. Ultimately, the future of work, such as auditing, will progress and evolve as AI’s evolution continues; importantly, employees need to diversify their skill sets, learn how to use AI to prompt (like Chat-GPT), and welcome this change as it will enable you to do more than ever before.
A common auditors’ work assignment, such as reviewing financial transactions for a company, comes with a massive time commitment and numerous to thousands of transactions to analyze and flag for any suspicious activities. Sorting through thousands of financial transactions to detect issues, flags, or problems takes days. AI can use algorithms for transaction testing, allowing the auditor to focus more time on procedures that require more significant professional judgment, such as risk assessment.
As this evolution continues and develops at faster speeds, skilled employees must not fear job displacement. Jobs will undoubtedly look different in the future. To stay ahead of the curve and avoid displacement, employees must develop skills and adapt their mindset to become lifelong learners.
Finding the Balance
In the face of AI’s rapid development, it is essential for businesses to adopt strategies that not only leverage the advantages of AI, but also maintain a balanced relationship with human expertise. A successful AI strategy should focus on augmentation rather than replacement; enhancing the capabilities of the human workforce. Here are several recommendations:
- Upskilling and Reskilling: Invest in comprehensive training programs to equip your workforce with the skills needed to work alongside AI; programs designed to educate employees and establish life-long learning mindsets. Employees must be willing to work with business leaders to develop effective business AI training implementations. This approach transforms AI from a potential job threat into a tool for job enhancement and growth. AI can keep workers equipped and prepared to take on the constantly accelerating pace at which business will continue to move.
- Collaborative AI Deployment: Utilize AI systems that are designed to collaborate with human workers, taking over routine tasks and allowing employees to focus on complex, value-adding activities, such as our auditing example; workers can do more intellectually demanding elements of their previous job experiences, accelerating analytics, allowing for deeper, more precise insight, and overall higher quality of life. Thus, enhancing productivity and job satisfaction while keeping humans central to your operations. Redesign business processes to optimize the collaboration between humans and AI. Focus on using AI to enhance human cognitive skills, creativity, and decision-making, while freeing workers from low-level tasks.
- Ethical AI Guidelines: Prioritizing your employees’ and customers’ safety and security regarding data privacy ensure transparency, fairness, and robust data privacy in your AI operations. By doing so, you build trust among employees and customers, and stay ahead of potential regulatory requirements, also enabling better maintenance of quality work-life relations and mutual trust between employees and businesses.
- Human-in-the-loop Systems: A system reliant on human feedback to improve and optimize learning from this feedback to create AI tools that are unique to the individual. The AI will improve more quickly with human expertise, allowing humans to have an integrated AI system that intuitively learns from them. Involving a human in every step of the AI process can keep humans essential and promote a collaborative environment for innovation to thrive, while also ensuring decisions are made on behalf of human interest.
- Augmentation without Over-Augmentation: Augmentation should remain at the forefront of AI implementation. Augmentation, the enhancement of human capabilities through AI, can lead to unprecedented levels of productivity and innovation. It allows employees to focus on tasks requiring human judgment, creativity, and interpersonal skills, while AI handles routine tasks. However, over-augmentation, leading to full automation, can strip away the unique human qualities vital to business, such as empathy and nuanced understanding. Therefore, businesses should aim for a harmonious blend of AI and human capabilities, where AI is used as a tool for enhancement rather than replacement. This especially rings true when dealing with customers in many industries as the human touch can be the deciding factor for the difference between a good and great customer experience.
By implementing these strategies, your business can maximize the advantages of AI integration, while ensuring your human workforce remains engaged, valued, and central to your operations. And the opportunity for rapid growth in any industry is prevalent like never before, as “the question is no longer if a company should use AI—but where it brings the greatest competitive advantage” (HBR).
Future Implications
Charting the Course of AI in Business
As we stand on the brink of an AI revolution, the future implications of AI integration in business are both exciting and daunting. The transformative power of AI is undeniable; promising a future where businesses thrive in a fast-paced environment fueled by AI where success, optimization, and efficiency intersect seamlessly.
Work will never be the same again, like the dawn of the computer, but as the godfather of AI, Geoffrey Hinton, says, AI is more of a danger to humanity than climate change.
However, our approach to this technology must continue to be one of caution and safety, for the outcome is essential to humanity’s continuation. We must remember that rapid, almost exponential technological improvements can cause massive shocks in the economy, job market, and social restraints.
The key to success lies in finding a balance between AI-driven insights and the unique qualities of human intuition, creativity, and ethical judgment. While AI can process vast amounts of data quickly and accurately, it lacks the emotional intelligence, social skills, and ethical considerations that only humans can provide. Therefore, it is essential to pair AI with human expertise to achieve optimal results.
Businesses must acknowledge who got them to where they are today and must choose to be loyal to their ethics and moral standings. Employees are essential to any workflow and replacing them can only have a negative overall impact. Sure, budgets will get smaller, and costs could be cut, but saving money is nothing compared to saving the future.
There are several types of AI that will impact the infrastructure and framework of our world. Some of the general outlines of this transformative intelligence were summarized by Ross Gruetzemacher and Jess Whittlestone, researchers from Auburn and Cambridge University Centre for the Future of Intelligence, in their paper “The Transformative Potential of Artificial Intelligence.”
Narrowly Transformative AI (NTAI): Any AI technology or application with the potential to lead to practically irreversible change focused primarily on a specific domain or sector of society, such as warfare or education. Historical analogue: the impact of nuclear weapons on warfare and international security.
Transformative AI (TAI): Any AI technology or application with the potential to lead to practically irreversible change that is broad enough to impact the most important aspects of life and society. One key indicator of this level of transformative change would be a pervasive increase in economic productivity (i.e., a ‘productivity bonus’ [17]). Historical analogues: GPTs such as electricity and the internal combustion engine.
Radically Transformative AI (RTAI): Any AI technology or application which meets the criteria for TAI and with potential impacts that are extreme enough to result in changes in key metrics to measure human progress and well-being. This indicates a level of societal transformation equivalent to that of the agricultural or industrial revolutions.
The potential across all industries is there, but with that said, priority #1 for businesses should be transparency and accountability when implementing AI. The decision-making should be held in the business leaders’ hands as the algorithms involved in AI systems (as stated before) are like a “black box”. With great complexity and complete opaqueness, there is still very much unknown regarding AI functionalities and networking. The decisions made by AI should be recommendations for businesses, not a cut-and-dry solution, and the decision-making process in future businesses should not have sole reliance on AI. It is vitally important for businesses and business leaders to step up to the plate and be willing to take full responsibility for decisions made with the help of AI.
The integration of AI into businesses offers tremendous potential for increased efficiency, productivity, and innovation. However, businesses must approach AI implementation with caution and careful consideration of its potential implications. As we continue to develop and utilize AI, it is essential to remember that it is a human creation, designed to enhance humanity. Let us ensure that AI remains a tool for human betterment; augmenting our capabilities rather than replacing them entirely.
Wrapping Things Up …
In conclusion, the successful integration of AI into business operations will require a balanced approach that values both AI capabilities and human expertise. By focusing on strategies that augment human work with AI, businesses can harness the full potential of AI while maintaining a thriving, engaged, and valued workforce.
This heralds a future where businesses thrive in a fast-paced environment fueled by AI, where success, optimization, and efficiency intersect seamlessly. In this new era, every company that harnesses this tech will find their improvements in software and systems becoming exponential, freeing up more time for expansion and innovation. The global landscape in business will have a huge shift as “AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined” (IBM).
The integration of AI into businesses has the potential to revolutionize the way we work; from automating simple tasks to enhancing complex decision-making processes. However, as with any new technology, there are inherent risks that must be managed. The displacement of workers, data privacy concerns, and the potential for AI to perpetuate biases and inequalities are all issues that must be addressed. It is crucial for businesses to approach AI implementation with caution and careful consideration of its potential implications.
The key to success lies in finding a balance between AI-driven insights and the unique qualities of human intuition, creativity, and ethical judgment. While AI can process vast amounts of data quickly and accurately, it lacks the emotional intelligence, social skills, and ethical considerations that only humans can provide. Therefore, it is essential to pair AI with human expertise to achieve optimal results.
A healthcare system that utilizes AI to analyze patient data can greatly benefit from the involvement of medical professionals who can offer insights based on their experience and ethical considerations.
Furthermore, businesses must prioritize transparency and accountability when implementing AI. The algorithms used in AI systems are often complex and opaque, making it difficult for humans to understand how decisions are being made. Therefore, it is essential to ensure that AI systems are transparent and that their decision-making processes can be explained in simple terms. Additionally, businesses must hold themselves accountable for the decisions made by AI systems and be willing to correct errors and address concerns.
In conclusion, the integration of AI into businesses offers tremendous potential for increased efficiency, productivity, and innovation. However, businesses must approach AI implementation with caution and careful consideration of its potential risks. By finding the right balance between AI-driven insights and human intuition, creativity, and ethical judgment, businesses can achieve optimal results and drive long-term success in an increasingly competitive global landscape. Let us embrace the uncertainty and quickly adapt to reap the benefits of this technological advancement, and let us work together harmoniously to drive innovation, productivity, and long-term success in the business world.
Eric Kreuter, PhD, CPA, CGMA, CFE, CBA, MAFF, is a Managing Director at CBIZ Marks Paneth and was an Adjunct Professor in the Graduate Finance Program at Manhattanville College in Purchase, NY where he taught Forensic Accounting. He previously served as an Associate Professor at Mercy College in Dobbs Ferry, NY, where he taught graduate classes in Human Resource Management. He also served as a volunteer at the Bedford Hills Correctional Facility and the Taconic Correctional Facility in Bedford Hills, NY. He is a Counselor at St, Christopher’s Inn located in Garrison, NY.
Dr. Kreuter can be contacted at (212) 201-3117 or by e-mail to ekreuter@markspaneth.com.
Andre Castillo, CPA, ABV, CFE, MBA, is a Supervisor in the Financial Advisory Services group at CBIZ Marks Paneth. He provides services related to forensic accounting, litigation consulting, economic damages, internal control reviews, and fraud investigations for his clients. Prior to joining CBIZ Marks Paneth, Andre started his career at KPMG LLP providing audit services to public companies in the sports and entertainment industry and the consumer products industry. He holds a BA in Economics from Boston College and an MBA/MS in Accounting from Northeastern University.
Mr. Castillo can be contacted at (914) 909-4932 or by e-mail to acastillo@markspaneth.com.
Luke Poirier is an honors student at the Dolan School of Business at Fairfield University in Fairfield, CT. He is a rising junior, majoring in finance and economics.
Ryan Constantino is an honors student at the Dolan School of Business at Fairfield University in Fairfield, CT. He is a rising junior, majoring in accounting and business analytics.
